Both Sides Regrouping For Vote On Tax Repeal

Senate To Vote On Income-tax Repeal

Outcome Uncertain

Leaders of the income-tax-repeal movement, who boasted a week ago that repeal would easily pass the Senate by a veto-proof margin, conceded Tuesday that they cannot predict the outcome.

The Senate postponed a vote to repeal the state income tax from Tuesday until 1 p.m. today, giving both sides time to regroup after a House vote Monday night stalled the drive for repeal.

"At this point, it's hard to say exactly what the vote will be," said Senate President Pro Tem John B. Larson, D-East Hartford, an income-tax opponent.

Larson said the vote for repeal could be as close as 22-14, two votes short of a veto-proof margin that many lawmakers say is needed to restart the repeal movement.

Only 19 senators are publicly committed to repeal.

The House passed the repeal bill 86-63, 15 votes short of the number needed to override the veto promised by Gov. Lowell P. Weicker Jr. The vote prompted opponents of repeal to declare victory Tuesday.

"I think it's clear repeal cannot pass the House of Representatives over the governor's veto," said Rep. Miles S. Rapoport, D-West Hartford, who opposes repeal.

House Speaker Richard J. Balducci, D-Newington, said income-tax opponents have privately told him they now would consider repairing the income tax to give the middle class a tax cut if repeal fails.

"It's gaining some momentum, I think," Balducci said of repair.

The repeal opponents have not unified behind a specific repair plan, although they generally agree that there is a need to shift some of the tax burden from the middle class to upper-income taxpayers.

Rep. Richard T. Mulready, D-West Hartford, co-chairman of the tax-writing finance committee, convened a group Tuesday afternoon with the goal of reaching a consensus on repair by the end of the week.

The effort was attacked by one of the leaders of the repeal movement, House Minority Leader Edward C. Krawiecki Jr., R-Bristol.

"This talk of `repair' is nothig more than a cruel hoax perpetrated by income-tax supporters to keep that tax alive," he

said. "These people should either put forth a specific, workable proposal for all to see or end this sham and vote for repeal."

Sen. Kevin B. Sullivan, D-West Hartford, is expected to propose an amendment today that would change the repeal legislation to a repair plan. The amendment also will offer budget cuts.

The alternative budget passed by the House would repeal the 4.5 percent income tax Jan. 1, exactly three months after the tax was first deducted from paychecks.

The new plan offers a tax cut of $386.5 million. Partially offsetting the $1 billion that would be lost with repeal of the income tax would be an increase of $363.4 million in the sales tax and a $261.1 million increase in other taxes.

The sales tax would increase from 6 percent to 8.25 percent and taxes on investment income and royalties would increase from 4.5 percent to a maximum of 10 percent.

The $7.6 billion budget would be cut by up to $209 million -- although the actual cuts could be as little as $24 million.

One of the biggest cuts would only delay $70 million in payments to the teachers' retirement fund to future years. Another $61 million would either shift costs to municipalities or cut local aid.

About $54 million in cuts were characterized as questionable by the legislature's nonpartisan Office of Fiscal Analysis, which said many of the savings demanded in the alternative budget are in the current budget.

The alternative budget would leave a projected $92 million deficit in the budget year that ends June 30 and a $1.2 billion gap the following year, the office said.

One of the reasons the gap is expected to be so large next year is that the alternative budget would rely this year on $482 million in income-tax receipts to be collected before Jan. 1.

The current budget, if unchanged, would produce a $173 million deficit this year and a $770.7 million gap next year, according to the analysis office. Weicker has proposed a plan to close the current-year deficit, but it needs legislative approval.

Rep. Dean P. Markham, D-East Hampton, said he fears that no matter which direction the legislature takes -- repeal, repair or the status quo -- another fiscal crisis is unavoidable next year.

"That's the truth of the matter," said Markham, who supports repeal.

The Senate is almost certain to amend the repeal bill passed by the House, meaning that after the vote today it will go back to the lower chamber. The House is not scheduled to reconsider the bill until Friday.

Larson said the legalization of video slot machines, which was deleted from the bill in the House, probably will be restored to the legislation in the Senate.

The slot machines would finance an urban aid program, an attempt to make urban lawmakers consider repeal, Larson said.

Technical amendments also are needed to allow the state treasurer to refinance the deficit from last year, Krawiecki said.